AUSTIN - Texas Attorney General Greg Abbott’s Medicaid Fraud Control Unit officers has arrested the former owner of a McAllen children’s rehabilitation center known as Just For Kids after a Travis County grand jury returned indictments against him for Medicaid fraud and personal enrichment schemes.

Charged also with tampering with a government document and misapplication of fiduciary property, Eliseo Sandoval, 36, of McAllen was indicted by the grand jury through the Travis County District Attorney’s Office. The charges are first-degree and state jail felonies, respectively.

I will not stop until we corral each and every criminal in this state who has lined their pockets with taxpayers money earmarked for children’s health care, said Attorney General Abbott. I will use every legal tool available to see that justice is done to this individual. I also thank the Health and Human Services Commission’s Office of Inspector General for their cooperation in this investigation.

Financial audits completed by the Office of Inspector General for the years 2001 and 2002 revealed $4.1 million in overpayments from Medicaid had been received by Just For Kids. The ensuing Attorney General’s investigation showed that during the same time period, Sandoval had acquired a ranch, an office building, several sports cars, a motorcycle and sport utility vehicles.

The indictments allege he used his position as president and majority stockholder of Just For Kids to divert money received from the Texas Medicaid program into a scheme to buy the ranch land and luxury vehicles. Sandoval reported that these funds were associated with medical services. While he did provide rehabilitation services to children, the costs of those services were inflated when reported to the Medicaid program.

Sandoval also filed annual reporting forms to the government claiming, falsely, to possess two college degrees, which, if true, entitled him to claim an increased salary payable through the Medicaid program.

After auditors notified Sandoval of the negative audit and the $4.1 million likely owed to the state, he filed for bankruptcy in July 2004, causing about 160 people to lose their jobs when the facility closed. The assets of Just For Kids have since been distributed to creditors.

The Attorney General was assisted by the Public Integrity Unit of the Travis County District Attorney’s Office. The case against Sandoval will be prosecuted by Assistant District Attorney Beverly Mathews and Assistant Attorney General Brian Johnson.